Exhibit 10.3
Burlington Coat Factory
Holdings, Inc.
2006
Management Incentive Plan
THIS AWARD AND ANY SECURITIES
ISSUED UPON EXERCISE OF THIS OPTION ARE SUBJECT TO RESTRICTIONS ON
VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS
AS SET FORTH HEREIN AND IN THE STOCKHOLDERS AGREEMENT AMONG
BURLINGTON COAT FACTORY HOLDINGS, INC. AND CERTAIN INVESTORS AND
MANAGERS, DATED AS OF APRIL 13, 2006 (THE “STOCKHOLDERS
AGREEMENT”). THIS OPTION AND ANY SECURITIES ISSUED
UPON EXERCISE OF THIS OPTION CONSTITUTE “MANAGEMENT
SHARES” AS DEFINED THEREIN.
Burlington
Coat Factory Holdings, Inc.
Non-Qualified Stock
Option Agreement
This agreement evidences a stock option granted
by Burlington Coat Factory Holdings, Inc., a Delaware corporation
(the “Company”), to the undersigned (the
“Employee”), pursuant to, and subject to the terms of
the Burlington Coat Factory Holdings, Inc. 2006 Management
Incentive Plan (the “Plan”), which is incorporated
herein by reference and of which the Employee hereby acknowledges
receipt. For the purpose of this Agreement, the
“Grant Date” shall mean _______,
200_. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Plan.
1.
Grant of Option
. This certificate
evidences the grant by the Company on the Grant Date to the
Employee of an option to purchase (the “Option”), in
whole or in part, on the terms provided herein and in the Plan, the
following Units as set forth below.
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[«Tranch1»] Units at $90 per Unit
(the “Tranche 1 Options”); and
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[«Tranch2»] Units at $180 per Unit
(the “Tranche 2 Options” and together with the Tranche
1 Options, the “Options”).
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Each
“Unit” consists of 9 shares of Class A Common Stock of
the Company, par value $.001 per share, and 1 share of Class L
Common Stock of the Company, par value $.001 per share, subject to
adjustment as provided in the Plan. The Option evidenced
by this certificate is not intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code (the
“Code”).
2. Vesting and
Exercisability .
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Vesting of
Units . Except as
otherwise specifically provided herein, the Options shall vest
according to the following schedule:
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40% on second
anniversary of the Grant Date;
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20% on third
anniversary of the Grant Date;
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20% on fourth
anniversary of the Grant Date; and
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20% on the
fifth anniversary of the Grant Date.
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All Options
shall become exercisable in the event of a Change of Control (as
defined in the Stockholders Agreement).
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Exercisability of Option . Subject to the terms of the Plan,
Options may be exercised in whole or in part at any time following
such time as such Option vests. The latest date on which
an Option may be exercised (the “Final Exercise Date”)
is the date which is the tenth anniversary of the Grant Date,
subject to earlier termination in accordance with the terms and
provisions of the Plan and this Agreement. For the
avoidance of doubt the Option may only be exercised for whole Units
and not any individual component shares thereof.
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3. Exercise of
Option . Each election to exercise this Option shall be subject
to the terms and conditions of the Plan and shall be in writing,
signed by the Employee or by his or her executor or administrator
or by the person or persons to whom this Option is transferred by
will or the applicable laws of descent and distribution (the
“Legal Representative”), and made pursuant to and in
accordance with the terms and conditions set forth in the
Plan.
4. Cessation of
Employment . Unless the Administrator determines
otherwise, the following will apply if the Employee’s
Employment ceases:
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Options that
have not vested will terminate immediately.
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Units that were
issued upon an exercise of the Option (including Units issued upon
exercise of Options contemplated by clause (c) below) will be
subject to the call options described in Sections 5 of the
Stockholders Agreement.
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Subject to the
terms of Section 6(a)(3) of the Plan, the vested Options will
remain exercisable for the shorter of (i) a period of 60 days or
(ii) the period ending on the Final Exercise Date, and will
thereupon terminate.
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5. Share
Restrictions, etc . The Employee’s rights with
respect to the Option and shares of Stock issued upon exercise of
the Option are subject to the restrictions and other provisions
contained in the Plan and the Stockholders Agreement in addition to
such other restrictions, if any, as may be imposed by
law. In the event of a conflict between the Plan and the
Stockholders Agreement, the Stockholders Agreement shall
control.
6. Legends,
Retention of Shares, etc . Shares
of Stock comprising Units issued upon exercise of the
Option shall bear such legends as are required by the Stockholders
Agreement and as may be determined by the Administrator prior to
issuance. Unvested Units purchased by the Employee upon
an exercise of the Option may be retained by the Company until such
Units vest.
7. Transfer of
Option . This Option is not transferable by the Employee other
than in accordance with the Stockholders Agreement.
8. Effect on
Employment . Neither the grant of this Option, nor
the issuance of Units upon exercise of this Option shall give the
Employee any right to be retained in the employ of the Company or
its Affiliates, affect the right of the Company or its Affiliates
to discharge or discipline the Employee at any time or affect any
right of Employee to terminate his employment at any
time.
9. Certain
Important Tax Matters . The Employee expressly
acknowledges that the Employee’s rights hereunder, including
the right to be issued Units upon exercise of Options, are subject
to the Employee promptly paying to the Company in cash (or by
suc
